Divinagracia vs. Parilla

Non-joinder of indispensable parties is not a ground for dismissal of an action; the proper remedy is to implead them, and only if the plaintiff refuses to comply with a court order to do so may the complaint be dismissed. In actions for partition, all co-heirs and persons having an interest in the property are indispensable parties whose joinder is required under Section 1, Rule 69 of the Rules of Court.

Conrado Nobleza, Sr. owned a 313-square meter parcel of land at the corner of Fuentes-Delgado Streets, Iloilo City, denominated as Lot 133-B-1-A and covered by Transfer Certificate of Title No. T-12255. During his lifetime, he contracted two marriages: the first with Lolita Palermo, yielding two children (Cresencio and Conrado, Jr.), and the second with Eusela Niangar, yielding seven children (Mateo, Sr., Coronacion, Cecilia, Celestial, Celedonio, Ceruleo, and Cebeleo, Sr.). He also begot three illegitimate children: Eduardo, Rogelio, and Ricardo. Two of his legitimate children—Mateo, Sr. and Cebeleo, Sr.—predeceased him and were survived by their respective children, who would inherit by representation under the Civil Code.

Conrado Nobleza, Sr. owned a 313-square meter parcel of land in Iloilo City, denominated as Lot 133-B-1-A and covered by Transfer Certificate of Title No. T-12255. He contracted two marriages during his lifetime: the first with Lolita Palermo, with whom he had two children, Cresencio and Conrado, Jr.; and the second with Eusela Niangar, with whom he had seven children: Mateo, Sr., Coronacion, Cecilia, Celestial, Celedonio, Ceruleo, and Cebeleo, Sr. He also had three illegitimate children: Eduardo, Rogelio, and Ricardo. Mateo, Sr. predeceased Conrado, Sr. and was survived by his children Felcon, Landelin, Eusela, Giovanni, Mateo, Jr., Tito, and Gaylord. Cebeleo, Sr. likewise predeceased his father and was survived by his wife, Maude, and children Cebeleo, Jr. and Neobel.

Upon Conrado, Sr.'s death, several of his heirs—Cresencio, Conrado, Jr., Felcon (purporting to represent his father Mateo, Sr. and his siblings), Coronacion, Celestial, Cecilia, Rogelio, Eduardo, and Ricardo—sold their respective interests over the subject land to Santiago C. Divinagracia for a consideration of ₱447,695.66, as embodied in a Deed of Extrajudicial Settlement or Adjudication with Deed of Sale dated November 22, 1989. The deed was not signed by the other heirs who did not sell their shares, namely Ceruleo, Celedonio, and Maude (representing her husband Cebeleo, Sr. and their children). On December 22, 1989, the same parties executed a Supplemental Contract stipulating that only ₱109,807.93 would be paid up front, with the remaining balance of ₱337,887.73 to be paid upon partition of the subject land.

Santiago was unable to have TCT No. T-12255 cancelled and the subject document registered because Ceruleo, Celedonio, and Maude refused to surrender the title. This refusal, coupled with their failure to partition the land, prompted Santiago to file a complaint for judicial partition and receivership on January 3, 1990. Ceruleo, Celedonio, and Maude opposed the complaint, maintaining that Santiago had no legal right to demand partition or compel surrender of the title because he had not paid the full purchase price and because the subject land was a conjugal asset of Conrado, Sr. and Eusela Niangar, such that only their legitimate issues could validly inherit it.

The RTC ruled in Santiago's favor, ordering partition between Santiago and the non-selling heirs, but held that Santiago did not validly acquire Mateo, Sr.'s share because Felcon lacked authority to bind his siblings. On reconsideration, the RTC further ordered Santiago to pay the balance of ₱337,887.73 upon partition. The CA, however, set aside both RTC rulings and dismissed the complaint, finding that Felcon's siblings and Cebeleo, Sr.'s children were indispensable parties whose non-inclusion was fatal to the action.

• Purchased Interests Eliminate Indispensable-Party Status: Santiago contended that he had already bought the interests of the majority of the heirs of Conrado, Sr., and therefore those heirs should no longer be regarded as indispensable parties in the action for partition.
• CA Erred in Dismissing the Complaint: Santiago's heirs, as petitioners, implicitly challenged the CA's outright dismissal of the complaint for non-joinder, seeking reinstatement or remand rather than termination of the action.

• Unpaid Purchase Price: Ceruleo, Celedonio, and Maude maintained that Santiago had no legal right to file an action for judicial partition or compel surrender of TCT No. T-12255 because he did not pay the full purchase price of the shares sold to him.
• Conjugal Asset and Inheritance Rights: Respondents argued that the subject land is a conjugal asset of Conrado, Sr. and Eusela Niangar, and thus only their legitimate issues may validly inherit the same.
• Indispensable Parties Omitted: Respondents supported the CA's ruling that Felcon's siblings and Cebeleo, Sr. and Maude's children are indispensable parties whose non-inclusion warranted dismissal of the complaint.

• Indispensable Parties: Whether Felcon's siblings and Cebeleo, Sr. and Maude's children are indispensable parties to Santiago's complaint for judicial partition.
• Propriety of Dismissal: Whether Santiago's complaint was properly dismissed for his failure to implead the omitted heirs.

• Indispensable Parties: Yes. All co-heirs and persons having an interest in the property to be partitioned are indispensable parties under Section 1, Rule 69 of the Rules of Court. Felcon's siblings, as co-representatives of the predeceased Mateo, Sr., and Cebeleo, Jr. and Neobel, as the proper representatives of the predeceased Cebeleo, Sr. under Article 972 of the Civil Code, have vested rights over the subject land and must be impleaded.
• Propriety of Dismissal: No. Non-joinder of indispensable parties is not a ground for dismissal. The proper remedy is to order the impleading of the omitted parties, and only if the plaintiff refuses to comply with such an order may the complaint be dismissed. The case was remanded to the RTC for inclusion of all indispensable parties and resolution on the merits.

• Indispensable Parties: An indispensable party is one whose interest will be affected by the court's action and without whom no final determination can be had. In actions for partition, Section 1, Rule 69 of the Rules of Court requires that all persons interested in the property be joined as defendants. Conrado, Sr.'s heirs—whether in their own capacity or in representation of a predeceased direct ascendant—have vested, pro-indiviso rights over the subject land. Mateo, Sr.'s interest should have been represented not only by Felcon but by all his children (Felcon, Landelin, Eusela, Giovanni, Mateo, Jr., Tito, and Gaylord), yet Santiago's complaint impleaded only Felcon. Similarly, Cebeleo, Sr.'s interest should have been represented by his children Cebeleo, Jr. and Neobel pursuant to Article 972 of the Civil Code, which provides that the right of representation takes place in the direct descending line, but the complaint impleaded only his wife, Maude. Santiago's argument that the heirs whose interests he purchased should no longer be considered indispensable parties was rejected: as a vendee, Santiago merely steps into the shoes of the vendors-heirs, and since his interest is derived from theirs, the issue of co-ownership must first be resolved, necessitating the joinder of all who have vested interests in the land. The absence of these indispensable parties rendered all subsequent actions of the RTC null and void for want of authority to act.

• Propriety of Dismissal: While the CA correctly set aside the RTC rulings due to the non-joinder of indispensable parties, it erred in ordering the outright dismissal of the complaint. Citing Heirs of Mesina vs. Heirs of Fian, Sr., the Court explained that the non-joinder of indispensable parties is not a ground for dismissal of an action. At any stage of a judicial proceeding, parties may be added on the motion of a party or on the initiative of the tribunal. Only if the plaintiff refuses to implead an indispensable party despite a court order may the complaint be dismissed for failure to comply with that order. Accordingly, the correct course was to remand the case to the RTC for inclusion of the omitted indispensable parties and disposition on the merits.

• Indispensable Parties in Partition Actions — An indispensable party is one whose interest will be affected by the court's action in the litigation, and without whom no final determination of the case can be had. The party's interest in the subject matter and in the relief sought is so inextricably intertwined with the other parties' that legal presence is an absolute necessity. In actions for partition, all co-heirs and persons having an interest in the property are indispensable parties under Section 1, Rule 69 of the Rules of Court, which requires joining as defendants all other persons interested in the property. The absence of an indispensable party renders all subsequent actions of the court null and void for want of authority to act, not only as to the absent parties but even as to those present. The Court applied this by identifying the omitted heirs of Mateo, Sr. (Felcon's siblings) and Cebeleo, Sr. (Cebeleo, Jr. and Neobel) as indispensable parties whose non-inclusion voided the RTC proceedings.

• Non-Joinder of Indispensable Parties Not Ground for Dismissal — The non-joinder of indispensable parties is not a ground for dismissal of an action. The proper remedy is to implead the omitted parties, either on motion of a party or on the initiative of the tribunal. Dismissal is warranted only if the plaintiff refuses to comply with a court order to implead. The Court applied this doctrine by remanding the case to the RTC rather than affirming the CA's outright dismissal, directing the lower court to implead all indispensable parties and proceed with resolution on the merits.

• "The non-joinder of indispensable parties is not a ground for the dismissal of an action. At any stage of a judicial proceeding and/or at such times as are just, parties may be added on the motion of a party or on the initiative of the tribunal concerned. If the plaintiff refuses to implead an indispensable party despite the order of the court, that court may dismiss the complaint for the plaintiff's failure to comply with the order." — This passage, quoted from Heirs of Mesina vs. Heirs of Fian, Sr., articulates the controlling rule that the absence of indispensable parties warrants impleader, not dismissal, and is the ratio decidendi for the Court's modification of the CA's disposition.

• "In his absence, there cannot be a resolution of the dispute of the parties before the court which is effective, complete, or equitable." — This defines the concept of an indispensable party and explains why the RTC proceedings were void for failure to implead all co-heirs with vested interests in the subject land.

• "Since his interest over the subject land is merely derived from that of the vendors-heirs, the latter should first be determined as co-owners thereof, thus necessitating the joinder of all those who have vested interests in such land." — This passage explains why Santiago's purchase of the majority of the heirs' interests did not eliminate the need to implead all heirs: the vendee steps into the shoes of the vendors, and co-ownership must first be established before partition can proceed.

• Heirs of Mesina vs. Heirs of Fian, Sr., G.R. No. 201816, April 8, 2013, 695 SCRA 345 — Controlling precedent directly cited for the proposition that non-joinder of indispensable parties is not a ground for dismissal; the proper remedy is to implead them. The Court relied on this case to justify remand rather than dismissal.
• Gabatin vs. Land Bank of the Philippines, 486 Phil. 366 (2004) — Cited for the definition of an indispensable party as one whose interest will be affected by the court's action and without whom no final determination can be had.
• Domingo vs. Scheer, 466 Phil. 235 (2004) — Cited for the rule that the absence of an indispensable party renders all subsequent actions of the court null and void for want of authority to act.
• Sepulveda, Sr. vs. Atty. Pelaez, 490 Phil. 710 (2005) — Cited for the proposition that all co-heirs and persons having an interest in the property are indispensable parties in an action for partition, and that such an action will not lie without their joinder.
• Quilatan vs. Heirs of Quilatan Lorenzo, 614 Phil. 162 (2009) — Cited both for the rule on nullity of proceedings absent indispensable parties and as a parallel case where the Court similarly ordered remand for failure to implead all indispensable parties in a partition complaint.
• Samson vs. Spouses Gabor, G.R. No. 182970, July 23, 2014 — Cited for the principle that in actions for partition, the court must first determine the existence of co-ownership before ordering division of the property.

• Section 1, Rule 69, Rules of Court — Requires that a person seeking partition of real estate must join as defendants all other persons interested in the property. The Court applied this provision to hold that all co-heirs and persons with vested interests in the subject land are indispensable parties who must be impleaded in Santiago's complaint for judicial partition.
• Article 972, Civil Code — Provides that the right of representation takes place in the direct descending line, but never in the ascending; in the collateral line, it takes place only in favor of the children of brothers or sisters. The Court applied this provision to determine that Cebeleo, Sr.'s interest should have been represented by his children, Cebeleo, Jr. and Neobel, not by his wife Maude.
• Articles 970–977, Civil Code — Govern the rules on representation in succession. The Court referenced these provisions to determine the proper representatives of the predeceased heirs Mateo, Sr. and Cebeleo, Sr. in the partition proceedings.

Chief Justice Maria Lourdes P.A. Sereno (Chairperson), Associate Justice Teresita J. Leonardo-De Castro, Associate Justice Lucas P. Bersamin, and Associate Justice Jose Portugal Perez concurred.